[Chapter 861: The Internet Economy]
The DVD chipsets were licensed for production, and although the Motorola board had reservations, they dared not voice them anymore. William White's opinions had to be respected; it had become an unspoken agreement.
Dealing with a domineering partner was a headache for the old-timers. At least they could just kick him out.
Look at the current legend of the mobile phone market; they were almost on par with Motorola. What made it even more embarrassing was that due to insufficient production capacity, they were considering opening a factory in China.
If they had known it would come to this, opposing him initially would have only proven their shortsightedness.
He had occasionally attended board meetings. Now, things had changed - it was either Filson or Fat Cat Tom showing up. William White hadn't been seen in Chicago for what felt like ages.
If he had been shortsighted, he might as well keep quiet. If there were any further issues with the semiconductor sector, the shareholders would surely vote with their feet.
Tom found it strange. As he looked at the slightly cramped office, he couldn't figure out why the boss wanted him to come over personally.
"Mr. Hanas, nice to meet you. I'm Jeff Bezos; you can just call me Jeff."
"Just call me Tom; Fat Cat is fine too."
"Alright, I'll call you Tom."
"Jeff, I hear your fund company is doing well. What made you venture into the internet?"
Tom was blunt, not beating around the bush at all. It might have felt impolite, but it came across as completely sincere. In America, the more polite you were in business talks, often the less promising it was.
"You see, internet users are increasing by 2000% annually, which is just mind-blowing. Working for those guys on Wall Street isn't all that exciting. Running my own fund company is quite a challenge."
"Well, tell me about your company's vision. We all know that Barnes & Noble dominates the book market, and most of our boss's books are sold through them."
"The internet model offers numerous conveniences. With no physical stores or staff, we maintain a very low gross margin."
"Wait a minute, I believe the low gross margin, but transportation costs aren't low either. Are you going to rely on the postal service?"
Snap! Jeff Bezos's heart sank; that was indeed a major headache. Postal packages were incredibly slow. As for FedEx, it was out of the question.
Sure, these books wouldn't mind a bit of tossing, as long as no one treated them like a basketball. Customers would get relatively intact copies.
"True, Tom, that's exactly what I'm working to solve. That's also the reason I'm seeking financing. You know, growing for a while before going for Series A is more cost-efficient. I've already invested three hundred thousand, plus some loans, totaling about five hundred thousand. I don't need an angel round."
"Of course, I think you know who I am."
"Sure, can you tell me your real intentions now?"
Fat Cat Tom shrugged, looking somewhat unimpressed. He pulled a DVD out of his bag and handed it to Jeff Bezos.
"What do you think? Got any ideas?"
"Damn, why didn't I think of that? If it's just books, it may be a bit monotonous. What if it included audio and video products?"
"Vinyl records might be tricky, but CDs and DVDs shouldn't be a problem. You know, they never handle them properly. We've even designed some nice packaging to protect them."
"Why?"
"Haha, not every business has to be done in-house. We present some fun projects to the boss, and then..."
"I need to think it over."
"Of course, but it'd be best to act fast. You mentioned a 2000% growth rate annually; your number is actually understated. The real data is even better."
Jeff Bezos had no doubts about Tom's claims. There were countless venture capital firms on the internet, none of which could stand toe to toe with White Capital.
After Fat Cat Tom left, Jeff Bezos found himself in a predicament. His cash flow was tight for a bookstore; adding audiovisual products would push his budget even further.
Take it slow? No way. Just look at ICQ now; it was burning cash. Almost every internet user was on it.
In the early days of the internet, everyone copied each other's ideas without any ethical considerations. The concept of instant messaging also attracted many, but one giant was troubling enough. If it stayed free, there was no further debate.
Data centers and servers incurred significant expenses. Investing tens of millions might appeal to some, but once the figure reached hundreds of millions, newcomers faced despair.
Besides, with so many potential projects available, why seek out such fierce competition? If they needed to raise billions, come IPO time, the founder would own less than 5% of the company's stock.
Isn't that what happened with Yahoo? It was thrilling to burn cash, but your share of the stock would diminish continuously.
Jeff Bezos, being a Wall Street veteran, might look young, but he was sharp. He had an inkling that William White's goal was to sell his DVDs.
Of course, it didn't matter much. In America, the sales of audio-visual products like CDs weren't that great, with tapes still being the primary choice. However, why did Tom keep bringing it up today?
Based on current sales figures, it might not warrant much fuss. However, it seemed this market segment was about to undergo significant changes.
"Tom, don't worry; he'll agree. Anyone who has worked on Wall Street knows how to read the room, or they would have been crushed ages ago. This guy was an executive at an investment bank before launching his fund company. Just think about it, a thirty-something executive.
Besides, if all else fails, can't I do it myself?"
"Ahem, well, I think he'll agree, and he'll figure it out quickly."
William White wasn't wrong; Jeff Bezos would soon grasp things. Internet businesses were like that. When you weren't fully developed yet, dealing with those giants truly meant playing their game with ease.
Many venture capital firms existed, but White Capital had a pretty solid reputation.
Of course, setting up some barriers was essential, such as asymmetric voting rights. Just because you didn't interfere with their management before didn't mean you wouldn't later. To avoid unnecessary troubles, it was better to have things well-defined in a contract.
Getting a huge deal? Not quite. As long as he signed a contract with White Capital, Amazon's valuation would soar, and its visibility would skyrocket.
Finding a pig's head at the temple? That described the current American situation. There was too much money, yet suitable investment projects were limited.
Investing based on a few sheets of paper was a high-stakes job. Don't assume that America was free of scammers -- people impersonating White Capital had schemes.
There were too many fools around, and the scammers clearly couldn't keep up. A simple scheme could rake in hundreds of thousands of dollars.
Originally, William White intended to run Amazon himself. But it was exhausting; he would rather stay behind a powerful figure and make a fortune that way. He wasn't greedy; before the IPO, holding 30% of the shares would suffice. The future was hard to predict. With ICQ racing ahead, the little penguin might just vanish.
If Jack Ma switched careers, Amazon would be just another player in the game.
*****
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